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AMA and Others File Suit to Block Red Flag Rules

In a long-anticipated maneuver, the American Medical Association (“AMA”), American Osteopathic Association (“AOA”) and the Medical Society of the District of Columbia (“MSDC”) filed a lawsuit last week seeking to block the Federal Trade Commission (“FTC”) from requiring physician practices to implement its “Red Flag” identity theft safeguards.

In an ongoing saga that HLP has followed (see previous posts on the postponement of Red Flag rules enforcement, the small business exemption amendment, and the American Bar Association suit that preceded the current AMA suit), physicians have argued that their practices should not be treated the same as financial institutions simply because the common practice of allowing patients to pay their bills over time qualifies physician practices, under the FTC’s definition, as “creditors.”

Note, this suit doesn’t affect the deadline for enforcement, which is set to begin on June 1, 2010.

For more information, please contact Abby Pendleton, Esq. at (248) 996-8510.

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